[296 U.S. 33, 34] Messrs. Carl H. Davis, of Wilmington, N.C., and Robert C. Alston and Wm. Hart Sibley, both of Atlanta, Ga., for appellant.
The Attorney General and Mr. Carl McFarland, of Washington, D.C., for appellees.
Mr. Justice BRANDEIS delivered the opinion of the Court.
This suit, under the Urgent Deficiencies Act, October 22, 1913, c. 32, 38 Stat. 208, 219 (28 USCA 43), was brought in August, 1934, by the Atlanta, Birmingham & Coast Railroad Company, in the federal court for Northern Georgia, to enjoin and annul an order of the Interstate Commerce Commission dated July 9, 1934, concerning accounting. Accounting for Capital Items (In re Atlantic Coast Line R. Co. and Atlanta, Birmingham & Coast R. Co.) 201 I.C.C. 645. The United States was named as defendant; and the Commission intervened. The defendants answered. The District Court dismissed the bill. The case is here on appeal.
The plaintiff is the company formed to take over, under an order of the Commission dated December 21, 1926, the properties of the Atlanta, Birmingham & Atlantic Railway, upon its reorganization. Reorganization and Control of Atlanta, Birmingham & Atlantic Ry. Co., 117 I.C.C. 181; Id., 117 I.C.C. 439. That order authorized the new company to issue for the properties $5,180,300 in preferred stock and 150,000 shares of no-par common stock; and authorized the Atlantic Coast Line, in consideration of the transfer to if of all the common stock, to guarantee 5 per cent. dividends on the preferred and to agree to extinguish all prior liens on the property, which aggregated $4,248,413.76. See United States v. Atlanta, Birmingham & Coast R. Co., 282 U.S. 522 , 51 S.Ct. 237. [296 U.S. 33, 35] The accounting rules promulgated by the Commission July 1, 1914, pursuant to section 20 of the Interstate Commerce Act (49 USCA 20), provide generally that the investment account shall show the 'actual money costs' to the 'accounting carrier'; and specifically as to Account 41, 'Cost of Road Purchased': 'This account shall include the cash cost of any road or portion thereof purchased. ... Where the consideration given for the property purchased is other than cash, such consideration shall be valued on a current cash basis.'
In opening its books of account as of January 1, 1927, the company contended that the value of 'Road and Equipment' must be ascertained in the usual manner; and that the value should be entered at $24,010,135.47, which amount was (with net additions made thereafter) the final single sum value of the properties as of June 30, 1914, found by the Commission in its report made in the Valuation Proceeding (Atlanta, Birmingham & Atlantic R. Co., 75 I.C.C. 645) in 1923; and it presented to the Commission the following balance sheet:
Assets: Account 701-Road and equipment $24,010,135.47 Other assets 2,698,817.73 ___ Total $26,708,953.20 Liabilities: Account 751-Capital stock account: Preferred stock $5,180,300.00 Common stock 21,528,653.20 ___ Total $26,708,953.20
The Commission refused to approve the balance sheet proposed. Reorganization and Control of Atlanta, Birmingham & Atlantic Ry. Co., 158 I.C.C. 6. It insisted that the item 'Road and equipment' be reduced to $6, 729,896.03 and that the item 'Common stock' be reduced to $4,248,413.76; and it held that these reductions were [296 U.S. 33, 36] required by the following condition incorporated in the order of December 21, 1926, which authorized the issue of the stock. 'Provided, however, and authority to issue said stock is granted upon the express condition, that, for the purposes of the accounting as provided in the classification of investment in road and equipment in the text of account 41, 'Cost of road purchased,' the cash value of the preferred stock issued must, in stating the transactions in the accounts, be reckoned on a basis not in excess of its par value; and that the cash value of the common stock must be reckoned on a basis not in excess of the amount received therefor.'
The company then brought the suit described in United States v. Atlanta, Birmingham & Coast R. Co., 282 U.S. 522 , 51 S.Ct. 237. The District Court sustained in that case the plaintiff's claim; but we held that its decree must be reversed and the bill dismissed for lack of jurisdiction, since no order requiring the accounting had been entered by the Commission.